LOVELY PROFESSIONAL UNIVERSITY

MITTAL SCHOOL OF BUSINESS

CORPORATE FINANCE-
ASSIGNMENT – 2
VENKY’S
DATE OF ALLOTMENT: 20/09/2021
SUBMISSION DATE: 17/10/2021

SUBMITTED BY: SUBMITTED TO:

VISHVJEET SINGH PANWAR MONIKA KALANI

SECTION: Q2141 COURSE CODE: FINM542

ROLL NO: RQ2141A83

 TABLE OF CONTENT

S. NO. Topic

1 Company profile

2 Long term source of finance

3 Short term source of finance

4 Comparison with peers

5 References

Learning Outcomes

This task tell us a lot about financial principles assign company. Helped us
understand how to examine short term and long term source of finance and
determine the impact of it on the firm’s and organizations.
 VENKATESHWARA HATCHERIES Pvt. Ltd.
COMPANY PROFILE

INTRODUCTION OF THE COMPANY-

The VH Group was established in 1971, when motivated by his wife Late Smt.
Uttaradevi Rao, our founder Chairman Late Padmashree Dr. B.V. Rao, fondly
referred to as “The Father of the Indian Poultry Industry”, established
Venkateshwara Hatcheries Pvt. Ltd. in Pune. Venkateshwara Hatcheries is one of
the most modern plants in poultry business in Asia. Today the group is popularly
known the world over as “Venky’s”. With a unique combination of expertise and
experience and supported by strategic collaborations, the company diversified its
activities to include SPF eggs, chicken and eggs processing, broiler and layer
breeding, genetic research and poultry diseases diagnostics, poultry vaccines and
feed supplements, vaccine production, bio- security products, poultry feed and
equipments, nutritional health products, soya bean extract and many more.

Today the group is largest fully integrated poultry group in Asia. The VH group
today plays proud parent to a number of reputed organizations under its wide
umbrella and successfully caters to poultry and its allied sectors. The pioneering
efforts of the VH group have been well rewarded with several national and
international awards.

PRODUCTS OF VENKY’S -

There are many categories of products which are produced by VENKEY’S, some
categories are given below –

1. AHP (Animal Health Care Products)

2. Bio Security Products
3. Biotech
4. Aqua
5. Human Health Care Products
6. Egg Powder
7. FMCG
8. VH Breeds
9. Vaccines
10. Equipments
11. Feed Supplements

Venky’s (India) Limited sells its processed and further processed chicken under
the Venky’s brand name. Venky’s is the first national brand in the processed
chicken segment and down the years, has become synonymous with nutrition,
quality, and high standards in hygiene. It is a preferred supplier to the Indian
outlets of McDonalds, KFC, Pizza Hut and Domino’s.

The product range, catered to retail as well as institutional markets, includes fresh
chilled chicken, frozen chicken(Whole, Boneless and Portions), and several
Economic products. Venky’s Mintomein, an array ready-to-cook products (Freezer
to Fryer, Microwaveable and cold cuts) has found wide appeal among
homemakers.

Total Income Graph Of Venky's

3500

3000

2500

2000

1500 Total Income Graph Of Venky's

1000

500

0
 INTERPRETATION
1.According to the annual report of Venky’s, the total income of Venky’s is
increased year by year.

2. In 2021 the total income of Venky’s is decreased in comparison to year 2020

that is 3152.43

LONG TERM SOURCES OF FINANCE

The sources of Long Term Finance are those sources from where the funds are
raised for a longer period of time, usually more than a year. Long term financing is
required for modernization, expansion, diversification and development of
business operations. Long term sources of finance are not repaid within one year
and often become a part of the founding capital of the company. Long term
source of finance are particularly useful when the business is looking to scale up
and expand. Equity, term loans, and venture capitals are all examples of long term
source of finance.

EQUITY SHARE CAPITAL- Equity share capital represents the money

contributed by owners and investors towards the capital of the company. Equity
share capital is also known as ‘share capital’ or simply ‘equity’. The number of
equity shares multiplied by the face value of each equity shares gives us the
equity share capital of the company.

Equity, typically referred to as shareholder’s equity (or owner’s equity for

privately held companies), represents the amount of money that would be
returned to a company’s shareholders if all of the assets were liquidated and all of
the company’s debt was paid off in the case of liquidation. In the case of
acquisition, it is the value of company sales minus any liabilities owned by the
company not transferred with the sale.
In addition, shareholder equity can represent the book value of company. Equity
can sometimes be offered as payment-in-kind. It also represents the pro-rata
ownership of a company’s shares.

Equity Share Capital

16
14
12
10
8
6 Equity Share Capital
4
2
0

INTERPREATION
1.The company’s equity share holdings same from 2017 to 2018.

Debt/liabilities- The terms ‘liabilities’ and ‘debt’ have similar definitions, but
there is a fundamental difference between the two. Liabilities are a broader term,
and debt constitutes as a part of liabilities. Debt refers to money that is borrowed
and is to be paid back at some future date. Bank loans are a form of debt.
Debt anything owed by one person to another. Debt can involve real property,
money, services, or other consideration. In finance, debt is more narrowly defined
as money raised through the issuance of bonds.
 Debt/Liabilities

800

700

600

500

400 Debt/Liabilities

300

200

100

0
March,2021 March,2020 March,2019 March,2018 March,2017

INTERPRETATION
1.As we see in the graph 2018 and 2019 has less debt or liabilities in compare to
2017.
2.In the year 2020 debt is 705.48 which is decreased to 625.92 the end of the
March,2021.

RETAINED EARNINGS- Retained earnings are an important concept in

accounting. The term refers to the historical profits earned by a company, minus
any dividends it paid in the past. The word “Retained” captures the fact that
because those earnings were not paid out to shareholders as dividends they were
instead retained by the company. For this reason, retained earnings decrease
when a company either loses money or pays dividends, and increase when new
profits are created. Retained earnings are a long term source of finance for a
company because there is no compulsory maturity like term loans and
debentures. Unlike other sources of financing, the use of retained earnings helps
avoid issue related costs.
 Retained Earnings

1200

1000

800

600
Retained Earnings
400

200

INTERPRETATION
1.The company’s retained earnings have rapidly increased from 516.95 in 2017 to
1090.33 in 2021

Long Term Borrowing- Long term borrowing consists of a long application

process where repayments are made for several years in order to pay off the loan.
The type of loan that you borrow affects the business considering the amount of
interest that you pay over the specified period of time. External resources, such as
external commercial borrowing, debentures, public fixed deposits, banks loans
and so on, are also used in specific instances. The practice of getting cash from
outside sources is known as borrowing.
 Long Term Borrowings
200
150
100
50 Long Term Borrowings
0

INTERPRETATION

1.As we see in graph the company’s long term borrowings have rapidly decreased
169.07 in 2017 to 12.68 in March, 2021.

LONG TERM LOANS- A form of loan that is paid off over an extended period of
time greater than 3 years is termed as a long term loan. This time period can be
anywhere between 3-30 years. Car loans, home loans and certain personal loans
are examples of long term loans. Long term can be availed to meet any business
need like buying of machinery or any personal need like owning a house. Long
term loans are the most popular form of credit in the financial industry.

With the advent of technology and easy banking home loans and business loans
have become a prevalent form of loan. These loans generally offer a hefty loan
amount and are thus spread over a considerable period of repayment tenure.

Long Term Loans

0.4
0.3
0.2
0.1
0 Long Term Loans
 INTERPRETATION
1.In graph we can see the company’s long term loans are decreased 0.37 in 2017
to 0.03 in March, 2021

SHORT TERM SOURCES OF FINANCE

Short term financing means the financing of business from short term sources
which are for a period of less than one year and the same helps the company in
generating cash for working of the business and for operating expenses which is
usually for a smaller amount and it involves generating cash by online loans, lines
of credit, invoice financing. Short term finance refers to financing needs for a
small period normally less than a year. In business, it is also known as working
capital financing. This type of financing is normally needed because of uneven
flow of cash into the business, the seasonal pattern of business, etc.

TRADE RECEIVABLES- Trade receivables are defined as the amount owed to a

business by its customer’s following the sale of goods or services on credit. Also
known as accounts receivable, trade receivables are classified as current assets on
the balance sheet.
Current assets are assets which are expected to be converted to cash in the
coming year. In addition to trade receivables, current assets also include items
such as cash, cash equivalent, stock inventory and pre-paid liabilities.

Trade Receivables
450
400
350
300
250
200
150 Trade Receivables
100
50
0
 INTERPRETATION
1.In graph the company’s trade receivables is continue increased 264.29 in 2017
to 448.43 in 2020.
2.As you see in the graph the company’s trade receivables is decreased in the end
of March, 2021 in compare to year 2020.

SHORT TERM Provisions- Short term refers to a period, and the actual duration is
dependent on the law of regulations applicable. In the case of assets, a short term can refer to
holding an asset for less than or equal to one year. In the case of current assets of a business,
such as inventory or bills receivable, the short term period may be within six months. The
examples of short term provisions are provisions for discount on debtors, provision for tax,
doubtful debts etc. A provision is termed as the cash amount, which is set aside from the
business profits and the specific amount is used to cover the known liability of the businesses.

Short Term Provisions

9
8
7
6
5
4
3 Short Term Provisions
2
1
0

SHORT TERM BORROWINGS- Liabilities that represent money borrowed from banks
or other institutions to fund the ongoing operations of a business that will come due within one
year. Short term and loan term borrowing may refer to the time period in which a loan is paid
back. Short term borrowing are generally to be repaid within a few months or a year or so.
 Short Term Borrowings

350
300
250
200
150
Short Term Borrowings
100
50
0

INTERPRETATION
1.The company’s short term borrowings 301.02 in 2017 and then it rapidly
decreased in 2018 and 2019.
2.The company’s short term borrowings is increased 254.56 in 2020 in compare to
year 2019, 2018 and then again it decreased in the end of March, 2021

TRADE PAYABLES- Trade Payables are obligations to pay for goods or services
that have been acquired from suppliers in the ordinary course of business. Trade
payables are classified as current liabilities if payment is due within one year or
less. These billed amounts, if paid on credit, are entered in the accounts payable
module of a company’s accounting software, after which they appear in the
accounts payable aging report until they are paid. Any amounts owed to suppliers
that are immediately paid in cash are not considered to do trade payables, since
they are no longer a liability.
 Trade payables

400

350

300

250

200 Trade payables

150

100

50

0
March,2021 March,2020 March,2019 March,2018 March,2017

INTERPRETATION
1.The company’s trade payables is continue increased 2017 to 2020.
2.In 2021 the trade payables of company’s decreased in compare to 2020.

SHORT TERM LOAN- A short term loan is a type of loan that is obtained to
support a temporary personal or business capital need. As it is a type of credit, it
involves repaying the principle amount with interest by a given due date, which is
usually within a year from getting the loan.

A short term loan is valuable option, especially for small businesses or start-ups
that are not yet eligible for a credit line from a bank. Short term loans are suitable
not only for business but also for individuals who find themselves with a
temporary, sudden cash flow issue.
 Short term Loan
30
25
20
15
10
5 Short term Loan
0

INTERPRETATION
1.As we see in the graph the company’s short term loan in year 2017 and 2018
very small difference.
2.After 2018 the company’s short term loan is rapidly decreased.

COMPARISION WITH PEER OF VENKY’S

1. Simran Farms Ltd.- The Simran Group was established in 1980 by the Bhatia
Family. Later on, as a result of strong determination and goal of serving the
society with nutritional poultry products and delivering actual value to its
customers through products and services at large, the company, Simran Farms
Limited (SPF) was incorporated in 1984 in Indore, Madhya Pradesh and was
converted into public limited company in 1993. Today the group is popularly
known as “Simran Group”.

With a unique combination of expertise and experience and supported by

strategic collaborations, the company has improved its performance of the
business with the passage of time. The company is mainly focused on integration
and consolidation of poultry products and activities. Its most modernized parent
poultry breeding farms are located near Indore in Madhya Pradesh. The
company’s hatcheries and contract rearing farms are located in Madhya Pradesh,
Chhattisgarh, Gujarat, Rajasthan, Punjab, Jammu & Maharashtra. Since 1980,
Simran Group has seen many ups and downs of poultry industry and its
worthwhile to not here that the management of the company depicted its
competitive strength by sticking to same line of business despite severe
recessionary trends that poultry industry went through since last years,

The performance of the company has been improving with the passage of time
and years. The average growth rate of the company is 20-25% every year. At
present the total turnover of the company is around Rs. 444.00 Crores. The
company is making all its endeavors to increase the business in an efficient and
effective manner and to achieve the higher profits in the coming years and set the
new benchmarks for the poultry industries.

COMPARE SIMRAN FARMS Ltd. WITH VENKY’S

Simran Farms Ltd. Venky’s (India) Ltd.

Market Capital (Rs Cr) 42.20 Market Capital (Rs Cr) 4,132.72

Sales (Rs Cr) 90.28 Jun,21 Sales (Rs Cr) 1,084.68 Jun,21

Net Profit Margin (%) 3.87 Mar,21 Net Profit Margin (%) 8.59 Mar,21

Last dividend (%) 8 31/05/12 Last dividend (%) 170 10/05/21

Return on average equity 75.96 Mar,21 Return on average equity 24.24 Mar,21

2. SKM Egg Products Export (India) Ltd.- SKM Egg products started the
journey of eggcellence in 1996 with the state of the art production facility
comprising best of technology and methods which are in line with international
level. SKM Egg products is one of the largest egg processing plant in Asia with a
capacity to process 1.8 million eggs per day to produce 6500 tonnes of egg
powder annually.

SKM Egg products is certified for IS022000, BRC, and HALAL to make quality egg
products. The state of the art quality assurance laboratory equipped with
sophisticated is ISO 17025 accredited. SKM has the capability to formulate and
develop various kinds of egg based mixes for bakeries and mayonnaise
applications. Our corporate social responsibility lies on trenvironment friendly
recycling of the wastes, like usage of egg shell grits as a calcium supplement to
feed mill, and drip irrigation of treated effluent water to landscape/garden, wind
mill, rainwater harvesting and actively participating in community uplift
programmes. Collaboration with BELOVO of Belgium a company of international
repute in R & D processing and marketing of egg products more than 25 years and
SKMs 3 Decades of experiences in the poultry industries gives SKM Egg products
the winning edge. The company obtained term loan from IFCI (Both Indian Rupees
and foreign currency) of Rs. 19 Crores and the project cause later escalated to Rs.
44 Crores due to exchange rate fluctuation.

COMPARE SKMs Egg Products Export (India) Ltd. With VENKY’S

SKM Eggs Ltd. VENKY’S

Total Income 258.48 Mar,21 Total Income 3152.43 Mar,21

Total Expenses 225.50 Mar,21 Total Expenses 2727.85 Mar,21

Profit and loss of the year 15.69 Mar,21 Profit and loss of the year 267.74 Mar,21

Net Profit Margin (%) 6.39 Mar,21 Net Profit Margin (%) 8.59 Mar,21

Assets Turnover Ratio (%) 118.27 Mar,21 Assets Turnover Ratio (%) 174.14 Mar,21
 REFERENCES
http://venkys.com/

https://www.moneycontrol.com/financials/venkys/balance-sheetVI/v03

https://economictimes.indiatimes.com/venky's-india-ltd/quotecompare/companyid-12827.cms

https://www.business-standard.com/company/venky-s-india-1250/peer-group

https://www.owler.com/company/venkys